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Global investment in clean energy totaled $56.6 billion in the third quarter - down 5% from the second quarter and 20% lower than in the third quarter of 2011, finds the latest quarterly report from Bloomberg New Energy Finance (BNEF).

These figures suggest that clean energy investment for the full year is likely to fall short of 2011's record $280 billion. If so, 2012 would be the first down-year for world investment in the sector in at least eight years.

The challenges facing clean energy in the third quarter continued to include policy uncertainty in key markets - such as the U.S., the U.K. and Italy - as well as the dampening effect of low sector share prices on public-market and venture-capital investment.

In addition, the recent sharp falls in the costs of wind and solar photovoltaic technologies have meant that the same megawatt capacity can now be purchased for significantly fewer dollars.

“The fact that 2012 looks like [it will be] a down-year is disappointing, but not surprising - indeed, we predicted as much in January,” says BNEF CEO Michael Liebreich. “The decline should not be exaggerated, either. The third-quarter figure was still well over $50 billion - roughly equivalent to investment in the whole of 2004.”

The third-quarter report shows that asset finance of utility-scale projects - such as wind farms, solar parks and biofuel plants - fell 10% to $32.3 billion. There was a bigger reduction compared to the third quarter of last year, when asset finance reached $49.5 billion - thanks, in large part, to the final throes of the U.S. federal loan-guarantee program, BNEF says.

“The locations of some of the biggest projects financed in Q3 of this year highlight the geographical shift that is taking place in clean energy, with established markets such as the U.S., Europe and China losing momentum while newer markets in South America, Asia and Africa pick up steam,” Liebreich notes.

The top three projects getting the financial go-ahead between July and September were the first phase of the Masen Ouarzazate solar thermal plant in Morocco, at 160 MW and $1.2 billion; the Nareva and International Power Tarfaya wind farm, also in Morocco, at 300 MW and $563 million; and the Verace wind portfolio in Brazil, at 258 MW and $497 million. The fourth-largest asset finance deal was a Chinese wind farm, and the fifth was an Australian wind project.

Investment in quoted clean energy companies on the public markets has remained very sluggish, at just $1.8 billion in the third quarter, although this was enough to represent a 47% increase over the second quarter and a 28% increase over the third quarter of last year.

Venture-capital and private-equity investors put just $1.3 billion into clean energy firms in the third quarter - down 20% from the second quarter and down 34% from the third quarter of 2011.

A sector split of the third-quarter investment total shows solar leading the way, with $33.8 billion, up 1% from the second quarter but down 22% from the third quarter of last year. Wind energy came in second, with $15.5 billion, down 26% on the quarter and 23% on the year, followed by small hydro in third, with $3.5 billion; biomass and waste in fourth, at $2 billion; energy-smart technologies in fifth, at $800 million; and biofuels in sixth, at $700 million.

A geographical split shows investment in the U.S. in the third quarter totaled $7.3 billion - down 28% on the quarter and down 62% on the year. China saw investment slip 17% on the quarter to $14.8 billion, although this was up 6% over the same three months of last year.

India’s investment fell 16% on the quarter to $1.5 billion and was down 60% from the same quarter in 2011, while Brazil showed a 94% increase on the quarter to $1.9 billion and a 24% increase on the year. Investment in Europe was $18.2 billion, down 2% on the quarter and down 29% on the year.

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